Shares continue to hover around $230, after having climbed back
from a huge dip in early 2016 that saw them plummet to near $150.

On Wall Street, everyone is reassessing their investor
relationship with Elon Musk's electric-car maker — especially now
that Tesla has decided, through the $2.6 billion acquisition of
SolarCity, to transform itself into a full-service purveyor of
green energy and sustainable lifestyles.

But something interesting is now happening with Tesla's stock —
after a lengthy period of notable volatility.

One of the guys

Since the beginning of the year, Tesla shares have been moving
more or less in parallel with other automakers. At Business
Insider, we follow General Motors, Ford, Fiat Chrysler
Automobiles, Ferrari, and Tesla closely — so I've overlaid all
five on this chart:

Screenshot via Google Finance

As you can see, Tesla has higher highs and lower lows. But
otherwise in 2016 its stock has mirrored the moves of the rest of
its sector. (A note on FCA trading well below its peers:
Ferrari's initial public offering took a lot of value out of the
company, and that's why you see a huge dip at the start of the
year.)

To be honest, I was a little surprised when I saw this. But if
you control for Tesla's boom-and-bust episodes, which are driven
more by news than by anything financially fundamental, the story
becomes clear: Tesla is turning into a real car company.

I'm not sure Musk is happy about this. Tesla has never wanted to
be a real car company. In fact, its willful resistance to doing
things the way everyone else does has been both an advantage and
a liability.

It's a plus that Tesla has set itself in opposition to a
traditional and often hidebound industry. But it's a negative for
the company to be turning itself into a mass-market carmaker with
the sensibility of a startup.

The former has made Tesla the most impressive car brand to come
along in decades. The latter has caused it to miss production and
delivery targets and to build vehicles, like the Model X SUV,
that are needlessly complicated.

The Model X
SUV.Benjamin Zhang/Business
Insider

The new battle

Even now, Tesla isn't conceding its fate. Over the next two
years, it's critically important that the company successfully
launch the Model 3, its $35,000 car for the rest of us (versus
its $100,000 luxury machines, like the models S and X). But Musk
doesn't sound like he wants to scale in the conventional way.

Instead, he wants to reinvent something called "vertical
integration," which is the way car companies operated in the
periods before and just after World War II. Effectively, they did
everything themselves, as exemplified by Henry Ford's legendary
River Rouge factory, where train cars laden with iron ore rolled
up to one side and finished cars rolled out the other.

Vertical integration was decisively displaced in the 1980s by
so-called lean or just-in-time manufacturing, and the industry
hasn't looked back.

Until now.

Musk's idea is that if he controls every aspect of production —
he often points out that Tesla's biggest constraint is that it's
only as fast as its slowest supplier — he can radically improve
the manufacturing process.

This is the "alien
dreadnought" concept, which he outlined on an earnings call
last week: His criteria for an innovative factory design is that
he'll know it's working when it no longer looks like a car plant,
but rather like an alien spaceship.

Bring on the alien dreadnought.Paramount Pictures

Why fight the power?

On one hand, Musk isn't arguing for some crazy new idea here;
futurists have speculated for decades about what a fully
automated manufacturing facility would be like.

On the other, this is kind of a convoluted way to build a
relatively inexpensive vehicle in the Model 3. If Tesla wanted
to, it could easily outsource production to a big industry player
like Magna and hit its production and delivery marks.

But that would be the predictable thing to do. And Musk hates
predictable.

However, Tesla's story is shifting back to a Wall Street one. For
a long time, the tale was one of growth, disruption, and share
prices that rocketed from $20 to almost $300, delivering a gain
of more than 1,000% to early investors.

But then the narrative was about Tesla becoming a much bigger
carmaker, with all the dreary plug and chug, nuts and bolts, and
blocking and tackling that such a shift demanded.

Look where we are now — Tesla is once again a stock story. But
like all the other automakers, it's a boring stock
story. Sure, the valuation is quite high. But even losses double
what analysts expected in the past quarter can't take a toll.

This raises a huge question: If Tesla somehow notched a profit on
quarter, would the stock explode?

I'd like to know. Unfortunately, there isn't much chance of that
happening anytime soon.